Wipro projects $1.11 billion earning from IT services in third quarter

Tuesday, October 27, 2009

BANGALORE - Wipro Ltd Tuesday projected an earning of $1.11 billion from IT services for third quarter (October-December) of this fiscal (2009-10), as revenue for second quarter (July-September) at $1.06 billion was higher than the guidance of $1.03 billion.

“We expect revenues from our IT services business to be in the range of $1.09-1.11 billion in the third quarter, as we see more stability in volumes and pricing,” Wipro chairman Azim Premji said in a statement here.

In a regulatory filing earlier, the IT bellwether said net profit for the second quarter increased by 19 percent year-on-year (YoY) to Rs.11.62 billion, as per the Indian accounting standard.

The net profit is higher than the projection of Rs.10.6 billion by analysts who keep track of Indian blue chip firms in the technology space.

But consolidated revenue for the quarter under review (Q2) increased modestly by six percent YoY to Rs.69.17 billion, as per the Indian accounting standard.

According to the International Financial Regulatory Standard (IFRS), the company’s net income at $243 million increased by 21 percent YoY, while total revenue increased by six percent YoY to $1.44 billion.

Revenue from IT services at $.106 billion was, however, four percent lower YoY though sequentially higher by 3.2 percent, as per the IFRS.

“Our broad portfolio of services and strong delivery excellence continue to position us as a partner of choice with customers,” Premji noted.

Operating margins for IT services increased by 143 basis points to 23.8 percent sequentially and 279 basis points on annualized basis.

In rupee terms, revenue from IT services at Rs.49.96 billion is an increase of five percent YoY and 3.5 percent sequentially.

“Our unwavering commitment to operational improvements continues to pay dividend, resulting in double-digit sequential growth in net profit,” Wipro chief financial officer Suresh Senapaty said in the statement.

The IT services business added 37 clients during the quarter.

The company’s IT products business recorded 18 percent YoY growth to Rs.11.83 billion, while consumer care and lighting grew by 11 percent YoY to Rs.5.87 billion.

With voluntary attrition marginally increasing to 10.5 percent from 8.4 percent in the first quarter (April-June) and involuntary attrition to 3.1 percent from 1.9 percent in the same period this fiscal, the headcount for IT services business decreased by 630 people to 97,891 from 98,521 sequentially.

On annualised basis, the headcount has increased by 330 people from 97,552 in the second quarter of last fiscal.

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